Sun of a BIF! Voided adjudication decisions are not a failure to decide
Andrew Orford | Samantha Byrne | Joey Henthorn
Key takeout
Under the Building Industry Fairness (Security of Payment) Act 2017 (Qld) (BIF Act), where a decision is affected by jurisdictional error, rendering or potentially rendering the decision void and unenforceable, it is not the same as the decision not having been made under s 94 of the BIF Act.
A claimant cannot make a request that the voided decision be referred to another adjudicator. If this happened, claimants could initiate multiple court proceedings adopting contradictory positions in relation to the same adjudication claim. This would be manifestly unfair to respondents and would bring the administration of justice into disrepute.
Facts
In September 2021, Sun Engineering (Qld) Pty Ltd (Sun) and Ravenswood Gold Pty Ltd (Ravenswood) entered into a construction contract.
In April 2023, Sun applied to the Registrar (appointed under section 150 of the BIF Act) for adjudication of a payment claim under the BIF Act for $13,146,506.45. On 19 July 2023, the adjudicator communicated his decision identifying an adjudicated amount of $9,170,485.24 (decision) payable to Sun.
Ravenswood notified Sun that it would be seeking to have the decision declared void.
On 25 July 2023, Sun sent an email to the Registrar stating:
- it was aware that Ravenswood would be seeking to have the decision declared void;
- while it maintained the decision was validly made, a purported but void determination, is not a determination and so the adjudicator had failed to make a determination;
- where the adjudicator fails to make a decision, s 94 of the BIF Act permits the claimant (Sun) to ask the Registrar to refer its claim to another adjudicator; and
- that due to the above, Sun requested the Registrar to refer its claim to another adjudicator.
The Registrar replied and refused to make the referral.
On 26 July 2023, Ravenswood filed an originating application seeking an order that the decision be declared void on the grounds of jurisdictional error.
On 27 July 2023, Sun filed an originating application seeking an order that the Registrar refer the adjudication application to another adjudicator.
Sun submitted that if the decision was ultimately declared void it would have the effect of there being no decision at all. Sun further submitted that if a decision was of no effect at the time it was given and no further decision was made before the lapse of time specified in the BIF Act, then s 94 of the BIF Act would operate to entitle Sun to the appointment of another adjudicator.
Decision
The court dismissed the application. Kelly J determined that s 94 contemplates a situation where the power of the adjudicator to make a decision is spent due to a lapse in time, rather than a situation where the adjudicator has purported to exercise the power to decide within time but the decision made is affected by jurisdictional error.
The two situations above are not the same under the BIF Act, as s 95 of the BIF Act draws a distinction between void and unenforceable decisions and a failure to make decisions. The court said that adjudication decisions affected by jurisdictional error will still have factual consequences. For example, the adjudicator is still paid fees where acting in good faith, and only part of the decision may be voided, meaning that a voided decision does not have the effect of there being no decision at all.
The court commented that its construction of s 94 was also consistent with a principle of statutory construction described broadly as the ‘presumption against unreasonable consequences’. This means that if Sun’s views were correct, claimants could always try and resist proceedings for judicial review of an adjudicator’s decision while, in separate proceedings, maintaining a right to compel the Registrar to refer the adjudication application to another adjudicator. Sun’s interpretation would therefore give rise to the prospect of multiple court proceedings in which a claimant might adopt contradictory positions. This would be manifestly unfair to the respondent and would bring the administration of justice into disrepute.